HDFC Bank will not be able to raise much money by way of foreign investment even as the Foreign Investment Promotion Board (FIPB) on Friday regularised its current overseas investment structure. That is because the board turned down the bank’s plea to not treat the promoter stake as foreign investment. Besides, the bank will also have to deposit a penalty as it was in the breach of FDI guidelines.
The FIPB is of the view that HDFC Bank’ parent HDFC Ltd’s 22.50 per cent holding in the bank is foreign investment and, hence, the total foreign holding in the bank stands at 73.20 per cent, which includes FII, FDI, ADR and GDR, according to an official.